NZ’s top energy experts are confident the lights will stay on this winter, despite it being the driest year since 1992 and hydro lake storage falling below 50% of average. Low lake levels have driven wholesale electricity prices to record levels. Electricity Commission Chairman David Caygill says NZ has sufficient back-up capacity, but power savings of 5% now would be “very useful.” Transpower CEO Dr Patrick Strange says the chance of ongoing blackouts is “very, very low.” And Energy Minister David Parker says if rain falls soon there might not be any need for additional measures, but concedes the longer the drought persists, the more steps will be required.

They agree there is enough generating capacity to last until rain finally falls, expected to be in late July or August. Combined with contingency measures, the country’s lights will stay on this winter. However some power companies are calling for savings of 10 to 15%. Other industry experts say the Govt should look at ordering ripple control on water heating to avoid involuntary cuts later on. Spot price levels have forced some industrial power users to scale back production, and load buyback may be negotiated with industrial users, some of whom have turned on standby generators to reduce the impact of high sport prices.

A general conservation campaign is ready to run. Parker says despite calls by some for this to have started already, this would have been premature. Campaigns become less effective over time and should not be started too soon. The major risk in the current situation stems from a power outage, either through plant failure, or a serious fault in the transmission system. Contact Energy took its Otahuhu B gas fired power station in Auckland off-line last Wednesday to repair a fault, but brought it back into service on Monday. The 10-year-old station has 400MW of capacity.

National’s energy spokesman Gerry Brownlee says the situation is “remarkably bad.” He says just to keep the lights on, NZers are relying on a broken Cook Strait cable, an asbestos-riddled mothballed plant in New Plymouth, and a diesel-guzzling emergency generator at Whirinaki. Among the options to ease the situation Contact Energy may fire up a second 100MW unit at New Plymouth, in addition to the one it signalled last month it would bring back into commission.

Mighty River Power may also bring forward from October to July the commissioning of its new Kawerau geothermal plant. The Govt may also activate legislation allowing for temporary lowering the minimum lake level for one or more of the hydro lakes. Parker says “predictions by doomsayers that the lights are expected to go out as a result of low lake levels are wrong.” Caygill describes the situation as “serious but not yet a crisis.”

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